Correlation Between National CineMedia and ZW Data

Can any of the company-specific risk be diversified away by investing in both National CineMedia and ZW Data at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining National CineMedia and ZW Data into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between National CineMedia and ZW Data Action, you can compare the effects of market volatilities on National CineMedia and ZW Data and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in National CineMedia with a short position of ZW Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and ZW Data.

Diversification Opportunities for National CineMedia and ZW Data

0.5

Correlation Coefficient

National CineMedia  ZW Data

Very weak diversification

The 3 months correlation between National and CNET is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and ZW Data Action in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZW Data Action and National CineMedia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on National CineMedia are associated (or correlated) with ZW Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZW Data Action has no effect on the direction of National CineMedia i.e., National CineMedia and ZW Data go up and down completely randomly.

Pair Corralation between National CineMedia and ZW Data

Given the investment horizon of 90 days National CineMedia is expected to generate 0.79 times more return on investment than ZW Data. However, National CineMedia is 1.27 times less risky than ZW Data. It trades about -0.05 of its potential returns per unit of risk. ZW Data Action is currently generating about -0.06 per unit of risk. If you would invest  644.00  in National CineMedia on December 28, 2024 and sell it today you would lose (83.00) from holding National CineMedia or give up 12.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

National CineMedia  vs.  ZW Data Action

National CineMedia

Risk-Adjusted Performance

Very Weak

Over the last 90 days National CineMedia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

ZW Data Action

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZW Data Action has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with National CineMedia and ZW Data

The main advantage of trading using opposite National CineMedia and ZW Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, ZW Data can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ZW Data will offset losses from the drop in ZW Data's long position.

The idea behind National CineMedia and ZW Data Action pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.